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A smart host is a type of email message transfer agent that allows a Simple Mail Transfer Protocol (SMTP) server to route email to an intermediate mailserver rather than directly to the recipient's server. This smart host often requires authentication from the sender to verify that the sender has privileges to have mail forwarded through the smart host. This is an important distinction from an open mail relay that will forward mail from the sender without authentication. Common authentication techniques include SMTP Authentication and POP before SMTP.
Use for backup mail (secondary MX) services
When configured to be a backup mail server (not the primary MX record), a smart host configuration will accept mail on behalf of the primary mail server if it were to go offline. When the primary mail server comes back online, mail is subsequently delivered via the smart host.
Use in spam control efforts
Some internet service providers (ISPs), in an effort to reduce email spam originating at their customer's IP addresses, will not allow their customers to communicate directly with the recipient's mail server via the default SMTP port number 25. In this case, the customer can get round this restriction by using a tunnel or VPN, or possibly by using an alternative TCP port number in SMTP, but otherwise the customer has no choice but to use the smart host provided by the ISP.
When a host runs its own local mail server, a smart host is often used to transmit all mail to other systems through a central mail server. This is used to ease the management of a single mail server with aliases, security, and Internet access rather than maintaining numerous local mail servers.